Cal-Maine Foods Inc (CALM)

The solvency ratios for Cal-Maine Foods Inc., based on the provided data, indicate a consistent financial position over the periods analyzed. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are all reported at zero across all dates, suggesting that the company had no recorded interest-bearing debt during these periods. This implies that Cal-Maine Foods Inc. financed its operations entirely through equity or other non-debt sources, reflecting a highly conservative or debt-averse financial structure.

Additionally, the financial leverage ratio remains constant at 1.21 throughout the period, indicating a moderate level of financial leverage relative to the company's total assets. The ratio of 1.21 suggests that for every unit of equity, the company maintains a proportional level of assets, with little to no reliance on debt financing. This stability in leverage implies that the company's capital structure is relatively conservative, maintaining a consistent balance between equity and assets without increasing leverage.

Overall, the absence of debt and the stable leverage ratio portray Cal-Maine Foods Inc. as a company operating with negligible financial risk related to leverage, emphasizing a strong equity position and minimal reliance on borrowed funds to finance its activities.

---

Coverage ratios

The analysis of Cal-Maine Foods Inc.’s interest coverage ratios over the specified periods indicates significant fluctuations in the company’s ability to meet its interest obligations. As of May 31, 2023, and June 3, 2023, the interest coverage ratios stand at approximately 1,713.78 and 1,715.99, respectively. These exceptionally high ratios suggest that the company had a very strong capacity to cover its interest expenses during this timeframe, reflecting robust earnings relative to interest obligations.

However, a notable decline is observed by May 31, 2024, with the ratio decreasing to 656.68, and marginally rising to 659.61 as of June 1, 2024. While still indicating a substantial buffer over interest payments, this decline may point to a reduction in earnings or increased interest expenses, signaling a potential decrease in financial flexibility or profitability in that period.

Encouragingly, the ratio improves significantly by May 31, 2025, reaching approximately 2,620.51. This resurgence suggests a marked strengthening in the company’s earnings capability to service its interest commitments, possibly due to improved profitability, refinancing, or other financial strategies that enhance its interest coverage.

Overall, the interest coverage ratios for Cal-Maine Foods Inc. have experienced variability across the analyzed periods; nevertheless, they remain well above the typical threshold of 1.5 to 2.0, indicating that the company generally maintains a comfortable margin of safety in covering interest expenses. The significant increase observed in the 2025 period indicates a positive trend in the company’s financial health and ability to meet its interest obligations with a high degree of certainty.